Documents & Reports

Tanzania continues to face a low risk of debt distress based on the external debt sustainability analysis (DSA). The external debt outlook improves as a result of an increase in the discount rate, but this is partly offset by: (i) a slower pace of fiscal... See More +Tanzania continues to face a low risk of debt distress based on the external debt sustainability analysis (DSA). The external debt outlook improves as a result of an increase in the discount rate, but this is partly offset by: (i) a slower pace of fiscal deficit reduction and (ii) a shift in the long-term composition of external financing towards more non-concessional loans. While the baseline public debt outlook remains favorable, continued fiscal consolidation is critical. In addition, recognizing the outstanding pension and other liabilities has an impact on the level of public debt. The baseline numerical analysis in this DSA does not take into account prospects related to natural gas resources whose scale, while potentially favorable, remains uncertain. These results highlight the need for Tanzania to sustain fiscal consolidation efforts, to adopt a conservative approach to non-concessional borrowing, to promptly address pension-related liabilities, and to further improve its debt management capacity.
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